SRX Post Holdings Inc.
TSX : SRX

August 15, 2008 08:23 ET

SRX Post Holdings Inc. Announces Execution of Arrangement Agreement

MONTREAL, QUEBEC--(Marketwire - Aug. 15, 2008) - SRX Post Holdings Inc. (TSX:SRX) (the "Company") announced today that it has entered into a definitive arrangement agreement (the "Arrangement Agreement") with Bonterra Energy Income Trust ("Bonterra Trust"), Bonterra Energy Corp. ("Bonterra Corp.") and Novitas Energy Ltd. ("Novitas") providing for the reorganization and recapitalization of the parties thereto (the "Arrangement").

The Company is currently an inactive public company incorporated under the Canada Business Corporations Act and has been operating under the protection of the Companies' Creditors Arrangement Act (the "CCAA") since November 19, 2007. The CCAA proceedings will result in (i) all liabilities of the Company being extinguished, (ii) Bonterra Trust making an investment of approximately $11,250,000 in the Company, (iii) the share capital of the Company being reorganized to enable the redemption of all outstanding common shares for nominal consideration and (iv) the corporate name of the Company being changed to Bonterra Energy Ltd. ("New Bonterra").

Subject to the terms and conditions of the Arrangement Agreement, the transaction will be carried out as an arrangement under the Business Corporations Act (Alberta). Under the Arrangement, New Bonterra will acquire all of the outstanding trust units of Bonterra Trust (the "Bonterra Units") by issuing common shares to holders of Bonterra Units on a one for one basis. In addition, Bonterra Corp. and Novitas, which currently hold the operating assets of Bonterra Trust, will amalgamate to form a new operating subsidiary of Bonterra Trust. Upon completion, the Arrangement will result in Bonterra Trust being converted to a corporation and holders of Bonterra Units becoming shareholders that own, indirectly, an economic interest in Bonterra Trust's business on the same basis as at present. Bonterra Trust intends to apply to have the common shares of New Bonterra listed on the Toronto Stock Exchange at the closing of the transaction.

The Board of Directors of Bonterra Corp., as administrator of Bonterra Trust, and the Board of Directors of the Company have unanimously approved the Arrangement.

The Company has agreed that it will not solicit or initiate any discussions concerning the pursuit of any other business combination. The Company has agreed to pay to Bonterra Corp. a termination fee of $300,000 in cash in certain circumstances. Bonterra Corp. has agreed to pay to the Company a $300,000 termination fee in certain circumstances. In addition, Bonterra Corp. has the right to match any superior proposal, and the Company has the right to respond to any superior proposal, in the event such a proposal is made.

The transaction shall be subject to, among other things, (i) regulatory and court approval, (ii) the approval by a majority of at least two thirds of the holders of Bonterra Units and the holders of options to purchase Bonterra Units, voting as a single class, who vote on the transaction and (iii) the approval of the plan of compromise and arrangement (the "CCAA Plan") to be submitted by the Company to its creditors pursuant to the CCAA and to the issuance by the Superior Court of Quebec of an order sanctioning the CCAA Plan.

The mailing of an information circular to the holders of Bonterra Units regarding the Arrangement and related matters is expected in September 2008. A meeting of the holders of Bonterra Units is expected to be held in October 2008. The completion of the Arrangement is expected shortly thereafter, subject to receipt of necessary regulatory and court approval and satisfaction or waiver of conditions.

Complete details of the terms of the Arrangement are set out in the Arrangement Agreement that will be filed by the Company on SEDAR (www.sedar.com) under its profile.

About SRX Post Holdings Inc.

The Company has been operating under the protection of the Companies' Creditors Arrangement Act (CCAA) since November 19, 2007. On August 14, 2008, the protection was extended to December 19, 2008.

On March 24, 2008, the Company entered into a definitive agreement with Lagasse Communications & Industries Inc. (Groupe Lagasse) to sell all of its property and assets related to the WiMAX business and symmetry™ line of products. The transaction closed on April 4, 2008 and the Company received cash proceeds of $6.05 million before transaction costs of $1.49 million. Following the sale of substantially all of its assets to Groupe Lagasse, the Company ceased operations and continues to pursue the monetization of its remaining assets.

Contact Information

  • SRX Post Holdings Inc.
    Marc Girard
    Senior Vice President and CFO
    514-335-2429, Ext. 4690